GLOBAL INVESTMENTS LIMITED (A mutual fund company incorporated with limited liability in Bermuda)

Transcription

1 GLOBAL INVESTMENTS LIMITED (A mutual fund company incorporated with limited liability in Bermuda) LETTER TO SHAREHOLDERS 27 MARCH 2012

2 GLOBAL INVESTMENTS LIMITED (A mutual fund company incorporated with limited liability in Bermuda) Board of Directors Mr Boon Swan Foo (Chairman and Non-Executive Director) Ms Tan Mui Hong (Deputy Chairman and Manager Nominated Director) Mr Adrian Chan Pengee (Independent Director) Mr Ronald Seah Lim Siang (Independent Director) Mr Tan Kok Wee (Independent Director) 27 March 2012 To: The Shareholders of Global Investments Limited Dear Sir/Madam 1. INTRODUCTION 1.1 We refer to: (c) the Notice of Annual General Meeting of Global Investments Limited (the Company ) dated 27 March (the Notice ), accompanying the Annual Report 2011, convening the 2012 Annual General Meeting (the 2012 AGM ) of the Company to be held on 19 April 2012; Resolution 4, being the Ordinary Resolution relating to the sub-division, re-classifi cation and re-designation of the authorised share capital of the Company to include preference shares of S$0.01 each in the capital of the Company ( Preference Shares ); Resolution 5, being the Special Resolution relating to the following proposed amendments to the bye-laws of the Company (the Bye-laws ): the proposed amendment to Bye-law 4 to provide for the sub-division, reclassifi cation and re-designation of the authorised share capital of the Company to include Preference Shares; the proposed amendment to Bye-law 7(g) to remove the specifi ed limits on the number of shares which may be issued pursuant to a general authority (and on the duration of such general authority) granted by holders ( Shareholders ) of ordinary shares of S$0.01 each in the capital of the Company ( Shares ) to the directors of the Company (the Directors or the Board ) and to replace such specifi ed limits with a reference to the rules or regulations of the Designated Stock Exchange (currently the Singapore Exchange Securities Trading Limited (the SGX-ST )) to allow for any changes in such limits as may be made by the Designated Stock Exchange (currently the SGX-ST) from time to time; 1

3 (iii) (iv) (v) the proposed insertion of the new Bye-laws 7(k) and 7(l) to provide for the power of the Company to issue Preference Shares, the rights of holders of Preference Shares ( Preference Shareholders ), whether the Company has the power to issue further Preference Shares ranking equally with, or in priority to Preference Shares already issued, and confer on Preference Shareholders the same rights as Shareholders as regards receiving notices, reports and balance sheets, and attending general meetings of the Company and the right to vote at general meetings of the Company in certain circumstances; the proposed insertion of the new Bye-laws 7A and 7B to provide for the creation and issue by the Company of Preference Shares; the proposed amendments to Bye-laws 8 and 8 to provide for, among others, the repayment of preference capital (other than redeemable preference capital) by the Company; (d) (e) Resolution 6, being the Ordinary Resolution relating to the proposed adoption of a mandate (the Preference Share Issue Mandate ) to authorise the Directors to issue Preference Shares; and Resolution 8, being the Ordinary Resolution relating to the proposed renewal of the mandate given by the Shareholders at the Special General Meeting held on 5 December 2011 (the 2011 SGM ) to enable the Company to purchase or otherwise acquire its issued Shares (the Share Purchase Mandate ). 2. PROPOSED SUB-DIVISION, RE-CLASSIFICATION AND RE-DESIGNATION OF THE AUTHORISED SHARE CAPITAL OF THE COMPANY AND PROPOSED BYE-LAW AMENDMENTS 2.1 The Company wishes to have the fl exibility to issue Preference Shares on such terms, including as to issue price, dividend entitlement (if any) and redemption price (if redeemable) as the Board may deem fi t, should the need arise, as a source of fi nancing or funding acquisitions or new investments. 2.2 Pursuant to Appendix 2.2 of the listing manual (the Listing Manual ) of the SGX-ST, the Bye-laws must set out the rights of Preference Shareholders, whether the Company has the power to issue further Preference Shares ranking equally with, or in priority to Preference Shares already issued, and confer on Preference Shareholders the same rights as Shareholders as regards receiving notices, reports and balance sheets, and attending general meetings of the Company and the right to vote at general meetings of the Company in certain circumstances. 2.3 Accordingly, in order to facilitate future fund raising exercises through the issuance of Preference Shares when necessary, the Company proposes to: subject to approval for the proposed amendments to the Bye-laws (the Bye-law Amendments ) as set out in paragraph 2.3 below, sub-divide, re-classify and redesignate its authorised share capital to include Preference Shares; and subject to approval for the proposed sub-division, re-classifi cation and re-designation of the authorised share capital of the Company to include Preference Shares as set out in paragraph 2.3 above, amend its Bye-laws to provide for the issue of Preference Shares, as follows: amend Bye-law 4 to provide for the sub-division, re-classifi cation and re-designation of the authorised share capital of the Company to include Preference Shares; 2

4 amend Bye-law 7(g) to remove the specifi ed limits on the number of shares which may be issued pursuant to a general authority (and on the duration of such general authority) granted by Shareholders to the Directors and to replace such specifi ed limits with a reference to the rules or regulations of the Designated Stock Exchange (currently the SGX-ST) to allow for any changes in such limits as may be made by the Designated Stock Exchange (currently the SGX-ST) from time to time; (iii) insert the new Bye-laws 7(k) and 7(l) to provide for the requirements of Appendix 2.2 of the Listing Manual (as described in paragraph 2.2 above); (iv) (v) insert the new Bye-laws 7A and 7B to provide for the creation and issue by the Company of Preference Shares and to incorporate the terms of the Class A Cumulative Preference Shares and the Class B Cumulative Preference Shares; and amend Bye-laws 8 and 8 to provide for, among others, the repayment of preference capital (other than redeemable preference capital) by the Company. 2.4 The text of the proposed Bye-law Amendments is set out in Appendix I of this Letter, with the alterations marked up against the existing Bye-laws. 3. PROPOSED ADOPTION OF THE PREFERENCE SHARE ISSUE MANDATE 3.1 Background The Company is seeking Shareholders approval at the 2012 AGM for the Preference Share Issue Mandate to be given to the Directors to issue new Preference Shares (subject to the limits set out in paragraph 4 below) and/or to make or grant offers, agreements or options that might or would require such Preference Shares to be issued, provided that the aggregate number of Preference Shares issued does not exceed twenty per cent. (20%) of the total number of issued shares in the capital of the Company at the time of passing of such resolution and such issue to be on such terms and conditions as the Directors may deem fi t. The Directors are of the opinion that a general (as opposed to a specifi c) approval for the Directors to issue new Preference Shares under the Preference Share Issue Mandate will enable the Company to act quickly and take advantage of market conditions as well as enable the Directors to have greater fl exibility and scope in negotiating with third parties in potential fund-raising exercises or other arrangements or transactions involving the capital of the Company. The expense and delay or otherwise in having to convene further general meetings of the Company to specifi cally approve the allotment and issuance of new Preference Shares, and thereby inconveniencing the Shareholders, will also be avoided. The Directors will only issue such Preference Shares pursuant to the Preference Share Issue Mandate if they consider it necessary and in the best interests of the Company. Pursuant to the requirements of the Listing Manual, the total number of issued Preference Shares will not exceed the total number of issued Shares at any time. 3.2 Validity Period The Preference Share Issue Mandate will be tabled as an Ordinary Resolution at the 2012 AGM. Upon Shareholders approval at the 2012 AGM, the authority conferred by the Preference Share Issue Mandate shall continue in force until the conclusion of the next annual general meeting or the date by which the next annual general meeting is required by law to be held, or until it is varied or revoked by the Company in general meeting, whichever is the earliest. Subject to its continued relevance to the Company, the Preference Share Issue Mandate may be put to Shareholders for renewal at subsequent general meetings of the Company. 3

5 3.3 Terms of the Preference Shares The terms of the Class A Cumulative Preference Shares and the Class B Cumulative Preference Shares are respectively set out in the proposed Bye-laws 7A and 7B, which are respectively set out in Appendix I of this Letter. A summary of the principal terms of the Class A Cumulative Preference Shares and the Class B Cumulative Preference Shares that may be issued pursuant to the Preference Share Issue Mandate is set out below: Class A Cumulative Preference Shares Cumulative Dividend : Dividends ( Class A Dividends ) on the Class A Cumulative Preference Shares will be cumulative, payable in Singapore dollars at a fi xed rate per annum on the Class A Liquidation Preference (as defi ned below) to be prescribed by the Board prior to the allotment and issuance of the Class A Cumulative Preference Shares. Step Up Dividends : The dividend rate may be increased by such rate per annum as may be prescribed by the Board prior to the allotment and issue of the Class A Cumulative Preference Shares in accordance with the provisions of the Bye-laws if any of the Class A Cumulative Preference Shares are not redeemed by the Company on the First Call Date (as defi ned below), with effect from (and including) the First Call Date and up to and excluding the date when such Class A Cumulative Preference Shares are fully redeemed by the Company, and/or in such other event(s) as may be prescribed by the Board prior to the allotment and issue of the Class A Cumulative Preference Shares. For the purposes of this Letter: Dividend Date means such two (2) dates in each year as determined by the Board prior to the allotment and issue of the relevant class of Preference Shares on which dividends on the relevant class of Preference Shares shall be payable semiannually, when, as and if declared by the Board, and, where any such date is not a Market Day, means the Market Day immediately following such date. First Call Date means such date as the Board may decide prior to the allotment and issue of the relevant Preference Shares. Market Day means a day on which the SGX-ST is open for trading in securities. Dividend Payment : Subject to the limitations and qualifi cations described in the Byeand Record Dates laws, Class A Dividends will be payable semi-annually, when, as and if declared by the Board, in arrears and to persons whose names the Class A Cumulative Preference Shares are registered in the register of members of the Company at the close of business in Singapore not less than six (6) Market Days prior to the relevant Dividend Date. 4

6 Dividend Deferral : The Company may, at its sole discretion, elect to defer the payment of a Class A Dividend which is otherwise scheduled to be paid on a Dividend Date to the next Dividend Date unless a Compulsory Dividend Payment Event (as defi ned below) has occurred, in accordance with the provisions of the Bye-laws. For the purposes of this Letter: Compulsory Dividend Payment Event means, at any time during the six-month period before the relevant Dividend Date: a discretionary dividend, distribution, interest or other payment has been paid or declared on or in respect of any Shares, securities ranking junior to the relevant class of Preference Shares or Parity Obligations (as defi ned below) of the Company; or any Shares, securities ranking junior to the relevant class of Preference Shares or Parity Obligations have been redeemed, repurchased or otherwise acquired by the Company. Parity Obligations means any Preference Shares or other similar obligations of the Company which are not expressly stated to rank in all material respects senior or junior to: the relevant class of Preference Shares; or any other guarantee given or support agreement entered into by the Company in respect of any Preference Shares or other preferred securities (not constituting debt obligations) having in all material respects the same ranking as Preference Shares, issued by any subsidiary of the Company and are not expressly stated to rank in all material respects senior or junior to the relevant class of Preference Shares. Dividend Stopper : In the event any Class A Dividend is not paid in full (whether or not declared by the Board) for any reason on any Dividend Date, the Company shall not: declare or pay any dividends or other distributions in respect of, or (if permitted) repurchase or redeem, its Shares or any other security or obligation of the Company ranking junior to the Class A Cumulative Preference Shares (or contribute any moneys to a sinking fund for the payment of any dividends or other distributions in respect of, or for the redemption of, any such shares, securities or obligations); or (if permitted) repurchase or redeem, any Parity Obligations which are securities (or contribute any moneys to a sinking fund for the payment of any dividends or other distributions in respect of, or for the redemption of, any such Parity Obligation), 5

7 in each case until the Company has paid all accumulated but unpaid Class A Dividends in full from the Issue Date (as defi ned below) (or an amount equivalent to the accumulated but unpaid Class A Dividends to be paid from the Issue Date has been irrevocably set aside in a separately designated trust account for payment to the holders of Class A Cumulative Preference Shares (the Class A Shareholders ) (except that such amount to be set aside shall be reduced by the Class A Dividends which have been paid, if any)). For the purposes of this Letter: Issue Date means the date on which the relevant class of Preference Shares are fi rst issued. Redemption Rights : The Class A Cumulative Preference Shares are perpetual securities with no maturity date, and are not redeemable at the option of the Class A Shareholders. The Class A Cumulative Preference Shares are redeemable at the option of the Company on: (c) (d) any Optional Redemption Date (as defi ned below); the occurrence of a Tax Event (as defi ned below); the occurrence of an Accounting Event (as defi ned below); or the occurrence of a Reference Security Default Event (as defi ned below), in each case upon and subject to the provisions of the Bye-laws. For the purposes of this Letter: Accounting Event means, as a result of: any change in, or amendment to, the accounting standards applicable to the Company; or any change in the general application or official interpretation of any law or regulation by any relevant body in Singapore or Bermuda, in each case which becomes, or would become, effective on or after the Issue Date, the relevant class of Preference Shares would not be classifi ed as equity instruments in the fi nancial statements of the Company. Optional Redemption Dates means the First Call Date and any Dividend Date on or after the First Call Date. 6

8 Reference Security Default Event means: any default, event of default or the like (however described) has occurred in respect of any present or future Financial Indebtedness (as defi ned in Appendix II of this Letter) of the Company and such Financial Indebtedness is declared to be due and payable prior to its stated maturity; or an announcement is made by the Company pursuant to the listing rules of the SGX-ST (including Rule 703 of the Listing Manual) of the occurrence of an event of default under debt or other securities or fi nancing or sale agreements. Tax Event means, as a result of: any change in, or amendment to, any law or regulation of Singapore or Bermuda or any political subdivision or any authority thereof or therein having power to tax; or any change in the general application or official interpretation of any law or regulation by any relevant body in Singapore or Bermuda, in each case after the Issue Date, payments to relevant class of Preference Shareholders with respect to the relevant class of Preference Shares would be subject to deduction or withholding for or on account of tax or would give rise to any obligation of the Company to account for any tax in Singapore or Bermuda, and such obligation cannot be avoided by the Company taking reasonable measures available to it. Voting Rights : The Class A Shareholders have the same rights as Shareholders as regards receiving notices, reports and balance sheets, and attending general meetings of the Company but generally shall not be entitled to any votes in respect of their Class A Cumulative Preference Shares except in the limited circumstances as set out below. If: (c) (d) (e) general meetings of the Company are convened for the purpose of reducing the capital of the Company; general meetings of the Company are convened for the purpose of winding up of the Company; general meetings of the Company are convened for the purpose of sanctioning a sale of the whole or substantially the whole of the undertaking of the Company; general meetings of the Company are convened where the proposal to be submitted to the meetings directly affects their rights and privileges as Class A Shareholders; or (and so long as) for such number of consecutive Dividend Periods (as defi ned below) as shall be equal to or exceed twelve (12 ) months, Class A Dividends, when, as and if declared by the Board, have not been paid in full when due and payable, 7

9 the Class A Shareholders shall have the right to receive notice of, attend, speak and vote at such general meetings of the Company, and in relation to paragraph (e), such right shall continue until after the next following Dividend Date on which a Class A Dividend is paid in full (or an amount equivalent to the Class A Dividend to be paid in respect of the next Dividend Period has been paid or irrevocably set aside in a separately designated trust account for payment to the Class A Shareholders). Every Class A Shareholder who is present in person at such general meetings shall have on a show of hands one (1) vote and on a poll one (1) vote for every Class A Cumulative Preference Share of which he is the Class A Shareholder. For the purposes of this Letter: Dividend Period means the period from (and including) the Issue Date to (but excluding) the fi rst Dividend Date and each successive period thereafter from (and including) a Dividend Date to (but excluding) the next succeeding Dividend Date. Liquidation Preference : Such amount for each Class A Cumulative Preference Share to be prescribed by the Board prior to the allotment and issuance of the Class A Cumulative Preference Shares ( Class A Liquidation Preference ). Rights Upon : In the event of the commencement of any dissolution or winding Liquidation up of the Company (other than pursuant to a Permitted Reorganisation) before any redemption of the Class A Cumulative Preference Shares, the Class A Cumulative Preference Shares shall rank: (c) junior to all other creditors (including the holders of subordinated debt) of the Company; pari passu with all Parity Obligations of the Company (including without limitation the Class B Cumulative Preference Shares); and senior to the holders of the Company s Shares and any other securities or obligations of the Company that are subordinated to the Class A Cumulative Preference Shares. For the purposes of this Letter: Governing Law : The laws of Bermuda. Permitted Reorgnisation means a solvent reconstruction, scheme of arrangement, amalgamation, reorganisation, merger or consolidation whereby all or substantially all the business, undertaking and assets of the Company are transferred to a successor entity which assumes all the obligations of the Company under the Preference Shares. 8

10 Class B Cumulative Preference Shares Cumulative Dividend : Dividends ( Class B Dividends ) on the Class B Cumulative Preference Shares will be cumulative, payable in Singapore dollars at a fi xed rate per annum on the Class B Liquidation Preference (as defi ned below) to be prescribed by the Board prior to the allotment and issuance of the Class B Cumulative Preference Shares. Dividend Payment : Subject to the limitations and qualifi cations described in the Byeand Record Dates laws, Class B Dividends will be payable semi-annually, when, as and if declared by the Board, in arrears and to persons whose names the Class B Cumulative Preference Shares are registered in the register of members of the Company at the close of business in Singapore not less than six (6) Market Days prior to the relevant Dividend Date. Dividend Deferral : The Company may, at its sole discretion, elect to defer the payment of a Class B Dividend which is otherwise scheduled to be paid on a Dividend Date to the next Dividend Date unless a Compulsory Dividend Payment Event has occurred, in accordance with the provisions of the Bye-laws. Dividend Stopper : In the event any Class B Dividend is not paid in full (whether or not declared by the Board) for any reason on any Dividend Date, the Company shall not: declare or pay any dividends or other distributions in respect of, or (if permitted) repurchase or redeem, its Shares or any other security or obligation of the Company ranking junior to the Class B Cumulative Preference Shares (or contribute any moneys to a sinking fund for the payment of any dividends or other distributions in respect of, or for the redemption of, any such shares, securities or obligations); or (if permitted) repurchase or redeem, any Parity Obligations which are securities (or contribute any moneys to a sinking fund for the payment of any dividends or other distributions in respect of, or for the redemption of, any such Parity Obligation), in each case until the Company has paid all accumulated but unpaid Class B Dividends in full from the Issue Date (or an amount equivalent to the accumulated but unpaid Class B Dividends to be paid from the Issue Date, has been irrevocably set aside in a separately designated trust account for payment to the holders of Class B Cumulative Preference Shares (the Class B Shareholders ) (except that such amount to be set aside shall be reduced by the Class B Dividends which have been paid, if any)). Redemption Rights : The Class B Cumulative Preference Shares will mature and be redeemed by the Company on the tenth anniversary of the Issue Date. The Class B Cumulative Preference Shares are not otherwise redeemable at the option of the Class B Shareholders. 9

11 Prior to the tenth anniversary of the Issue Date, the Class B Cumulative Preference Shares are redeemable at the option of the Company on: (c) any Optional Redemption Date; the occurrence of a Tax Event; the occurrence of a Reference Security Default Event, in each case upon and subject to the provisions of the Bye-laws. Voting Rights : The Class B Shareholders have the same rights as Shareholders as regards receiving notices, reports and balance sheets, and attending general meetings of the Company but generally shall not be entitled to any votes in respect of their Class B Cumulative Preference Shares except in the limited circumstances as set out below. If: (c) (d) (e) general meetings of the Company are convened for the purpose of reducing the capital of the Company; general meetings of the Company are convened for the purpose of winding up of the Company; general meetings of the Company are convened for the purpose of sanctioning a sale of the whole or substantially the whole of the undertaking of the Company; general meetings of the Company are convened where the proposal to be submitted to the meetings directly affects their rights and privileges as Class B Shareholders; or (and so long as) for such number of consecutive Dividend Periods as shall be equal to or exceed twelve (12) months, Class B Dividends, when, as and if declared by the Board, have not been paid in full when due and payable, the Class B Shareholders shall have the right to receive notice of, attend, speak and vote at such general meetings of the Company, and in relation to paragraph (e), such right shall continue until after the next following Dividend Date on which a Class B Dividend is paid in full (or an amount equivalent to the Class B Dividend to be paid in respect of the next Dividend Period has been paid or irrevocably set aside in a separately designated trust account for payment to the Class B Shareholders). Every Class B Shareholder who is present in person at such general meetings shall have on a show of hands one (1) vote and on a poll one (1) vote for every Class B Cumulative Preference Share of which he is the Class B Shareholder. Liquidation Preference : Such amount for each Class B Cumulative Preference Share to be prescribed by the Board prior to the allotment and issuance of the Class B Cumulative Preference Shares ( Class B Liquidation Preference ). 10

12 Rights Upon : In the event of the commencement of any dissolution or winding Liquidation up of the Company (other than pursuant to a Permitted Reorganisation) before any redemption of the Class B Cumulative Preference Shares, the Class B Cumulative Preference Shares shall rank: (c) junior to all other creditors (including the holders of subordinated debt) of the Company; pari passu with all Parity Obligations of the Company (including without limitation the Class A Cumulative Preference Shares); and senior to the holders of the Company s Shares and any other securities or obligations of the Company that are subordinated to the Class B Cumulative Preference Shares. Governing Law : The laws of Bermuda. In addition to the principal terms and conditions as set out above, the issue of the Preference Shares may be subject to other additional terms and conditions as the Directors may deem fi t and in accordance with the Bye-laws. The Company will make the necessary announcements setting out the details of such other additional terms and conditions, if any, upon any issue of Preference Shares. 3.4 Differences Between the Principal Terms of the Class A Cumulative Preference Shares and the Class B Cumulative Preference Shares The main differences between the principal terms of the Class A Cumulative Preference Shares and the Class B Cumulative Preference Shares are as follows: Step Up Dividends: only the terms of the Class A Cumulative Preference Shares provide for Step Up Dividends, as set out in Terms of the Preference Shares Class A Cumulative Preference Shares Step Up Dividends in paragraph 3.3 above; and Redemption Rights: The Class A Cumulative Preference Shares are perpetual securities with no maturity date and are not redeemable at the option of the Class A Shareholders. The Class B Cumulative Preference Shares will mature and be redeemed by the Company on the tenth anniversary of the Issue Date, but are not otherwise redeemable at the option of the Class B Shareholders. The Class A Cumulative Preference Shares are redeemable at the option of the Company on any Optional Redemption Date, the occurrence of a Tax Event, the occurrence of an Accounting Event or the occurrence of a Reference Security Default Event. The Class B Cumulative Preference Shares are redeemable at the option of the Company, but only prior to the tenth anniversary of the Issue Date, on any Optional Redemption Date, the occurrence of a Tax Event or the occurrence of a Reference Security Default Event, but not on the occurrence of an Accounting Event. 3.5 Section 54(1) of the Bermuda Companies Act As a mutual fund company in Bermuda, the Company, when declaring or paying dividends, is subject to the cash fl ow solvency test set out in Section 54(1) of the Companies Act 1981 of Bermuda, as amended or modifi ed from time to time (the Bermuda Companies Act ), pursuant to which a company shall not declare or pay a dividend, or make a distribution out of contributed surplus, if there are reasonable grounds for believing that the company is, or would after the payment be, unable to pay its liabilities as they become due. 11

13 In the event that a declaration or payment of dividends would be in contravention of Section 54(1) of the Bermuda Companies Act, the Company will exercise the right to defer dividends as set out in Terms of the Preference Shares Class A Cumulative Preference Shares Dividend Deferral and Terms of the Preference Shares Class B Cumulative Preference Shares Dividend Deferral in paragraph 3.3 above. 3.6 Conditionality of the Proposed Preference Share Issue Mandate on the Approval of the Proposed Bye-law Amendments The proposed Preference Share Issue Mandate is conditional upon approval for the proposed Bye-law Amendments set out in paragraph 2.3 above. Accordingly, the resolution for the proposed Preference Share Issue Mandate shall not be passed if the proposed Bye-law Amendments are not approved. For the avoidance of doubt, approval for the proposed Bye-law Amendments as set out in Appendix I of this Letter is not conditional upon approval of the proposed Preference Share Issue Mandate. For the avoidance of doubt, as set out in paragraph 2.3 above, approval for the proposed sub-division, re-classifi cation and re-designation of the authorised share capital of the Company and approval for the proposed Bye-law Amendments are inter-conditional, but neither is conditional upon approval of the proposed Preference Share Issue Mandate. 4. LIMITS ON THE ISSUE OF PREFERENCE SHARES 4.1 As set out in paragraph 3.1 above, the aggregate number of Preference Shares to be issued pursuant to the Preference Share Issue Mandate shall not exceed twenty per cent. (20%) of the total number of issued shares in the capital of the Company at the time of passing of the Preference Share Issue Mandate. 4.2 Further, the Bye-laws provide that Borrowings (as defi ned in Appendix II of this Letter) incurred by the Reference Group (as defi ned in Appendix II of this Letter) shall not exceed thirty-fi ve per cent. (35%) of the Gross Investment Value (as defi ned in Appendix II of this Letter) calculated at the time the Borrowing is incurred. 4.3 Notwithstanding that the proceeds from the issue of the Class A Cumulative Preference Shares (the Class A Proceeds ) are not expected to be treated as Borrowings, the Company intends that the aggregate number of Class A Cumulative Preference Shares to be issued pursuant to the Preference Share Issue Mandate shall not exceed such number as would, at the date of issue of the Class A Cumulative Preference Shares, result in the gross Class A Proceeds exceeding thirty-fi ve per cent. (35%) of the Gross Investment Value of the Company. Based on the Gross Investment Value of the Company of S$ million as at 31 December 2011, the gross Class A Proceeds shall not exceed S$58.6 million. 4.4 The proceeds from the issue of the Class B Cumulative Preference Shares (the Class B Proceeds ) are expected to be treated as Borrowings. As such, the aggregate number of Class B Cumulative Preference Shares to be issued pursuant to the Preference Share Issue Mandate shall not exceed such number as would, at the date of issue of the Class B Cumulative Preference Shares result in the gross Class B Proceeds, when aggregated with the rest of the Borrowings (which, for the avoidance of doubt, will not include the Class A Proceeds), exceeding thirty-fi ve per cent. (35%) of the Gross Investment Value. Based on the Gross Investment Value of the Company of S$ million as at 31 December 2011, the gross Class B Proceeds shall not exceed S$58.6 million. 5. LISTING AND QUOTATION OF THE PREFERENCE SHARES ON THE SGX-ST The listing and quotation of the Preference Shares on the SGX-ST shall be subject to the approval by the SGX-ST and any conditions imposed by the SGX-ST in granting such approval. Application will be made to the SGX-ST for the approval of the listing and quotation of the Class A Cumulative Preference Shares and/or the Class B Cumulative Preference Shares on the SGX-ST after the Company has decided to proceed with the issue of the Class A Cumulative Preference Shares and/or the Class B Cumulative Preference Shares, and the terms of such Preference Shares have been determined. 12

14 Listing of the Preference Shares on the SGX-ST are not to be taken as an indication of the merits of the Preference Shares, the Company, its subsidiaries or its associated companies (if any). 6. PROPOSED RENEWAL OF THE SHARE PURCHASE MANDATE 6.1 Background At the 2011 SGM, the Shareholders had approved, inter alia, the Share Purchase Mandate. The authority and limitations on the Share Purchase Mandate were set out in the circular to Shareholders dated 10 November 2011 and Ordinary Resolution 3 set out in the notice of the 2011 SGM dated 10 November The Share Purchase Mandate was expressed to take effect on the date of the passing of Ordinary Resolution 3 at the 2011 SGM and will expire on the conclusion of the 2012 AGM. Accordingly, the Directors propose that the Share Purchase Mandate be renewed at the 2012 AGM. The Company has not made any purchases or acquisitions of its Shares pursuant to the Share Purchase Mandate. 6.2 Rationale for Proposed Renewal of the Share Purchase Mandate The rationale for the Company to undertake the purchase or acquisition of its Shares is as follows: (c) in line with international practice, the Share Purchase Mandate will provide the Company with greater fl exibility in managing its capital and maximising returns to its Shareholders. To the extent that the Company has capital and surplus funds which are in excess of its possible fi nancial needs, taking into account its growth and expansion plans, the Share Purchase Mandate will facilitate the return of excess cash and surplus funds to Shareholders in an expedient, effective and cost-effi cient manner; share repurchase programmes help buffer short-term share price volatility and off-set the effects of short-term speculation by investors and, in turn, bolster Shareholder confi dence; and the Share Purchase Mandate will provide the Company the fl exibility to undertake share repurchases at any time, subject to market conditions, during the period when the Share Purchase Mandate is in force. The purchases or acquisitions may, depending on market conditions at the relevant time, lead to an enhancement of the net asset value and/or earnings per share and would allow the Company to optimally allocate its resources and maximise Share value and is one of the ways through which the return on equity of the Company and its subsidiaries (the Group ) may be enhanced. The purchase or acquisition of Shares will only be undertaken if it can benefi t the Company and Shareholders. While the Share Purchase Mandate would authorise a purchase or acquisition of Shares up to the ten per cent. (10%) limit described in paragraph 6.3 below, Shareholders should note that purchases or acquisitions of Shares pursuant to the Share Purchase Mandate may not be carried out to the full ten per cent. (10%) limit as authorised and no purchase or acquisition of Shares will be made in circumstances which would have or may have a material adverse effect on the liquidity and capital adequacy position or fi nancial position of the Company or the Group as a whole. 6.3 Authority and Limits of the Share Purchase Mandate The authority relating to, and limitations placed on, purchases or acquisitions of Shares by the Company under the Share Purchase Mandate, if renewed at the 2012 AGM, are summarised below: Maximum Number of Shares Only Shares which are issued and fully paid-up may be purchased or acquired by the Company. The total number of Shares which may be purchased or acquired by the Company pursuant to the Share Purchase Mandate is limited to that number of Shares 13

15 representing not more than ten per cent. (10%) of the issued Shares of the Company as at the date of the 2012 AGM (subject to any proportionate adjustments as may result from any capital subdivision and/or consolidation of the Company) Duration of Authority Purchases or acquisitions of Shares may be made, at any time and from time to time, on and from the date of the 2012 AGM at which the renewal of the Share Purchase Mandate is approved, up to: (iii) the conclusion of the next annual general meeting of the Company or the date by which the next annual general meeting of the Company is required by law to be held; or the date on which the authority conferred by the Share Purchase Mandate is varied or revoked by the Company in general meeting; or the date on which purchases and acquisitions of Shares pursuant to the Share Purchase Mandate are carried out to the full extent mandated, whichever is the earliest Manner of Purchases or Acquisitions of Shares Purchases or acquisitions of Shares may be made by way of: On-market purchases ( Market Purchases ) of Shares transacted on the SGX- ST through one or more duly licensed dealers appointed by the Company for the purpose; and/or Off-market purchases ( Off-Market Purchases ) of Shares made in accordance with an equal access scheme. The Directors may impose such terms and conditions which are not inconsistent with the Share Purchase Mandate, the Memorandum of Association, the Bye-laws, the Listing Manual and the Bermuda Companies Act as they consider fi t in the interests of the Company in connection with or in relation to any Off-Market Purchases. An Off-Market Purchase must, however, satisfy all the following conditions: offers for the purchase or acquisition of Shares shall be made to every person who holds Shares to purchase or acquire the same percentage of their Shares; all of those persons shall be given a reasonable opportunity to accept the offers made; and (c) the terms of all the offers are the same, except that there shall be disregarded (1) differences in consideration attributable to the fact that offers may relate to Shares with different accrued dividend entitlements and (2) differences in the offers introduced solely to ensure that each person is left with a whole number of Shares. If the Company wishes to make an Off-Market Purchase in accordance with an equal access scheme, it will issue an offer document containing at least the following information: (iii) the terms and conditions of the offer; the period and procedures for acceptances; and the information required under Rules 883(2), (3), (4), (5) and (6) of the Listing Manual. 14

16 6.3.4 Purchase Price The purchase price (excluding related brokerage, commission, applicable goods and services tax, stamp duties, clearance fees and other related expenses) to be paid for a Share will be determined by the Directors subject to, and in accordance with, the Listing Manual and the Bye-laws. The purchase price to be paid for the Shares as determined by the Directors, in the case of a Market Purchase and an Off-Market Purchase pursuant to an equal access scheme, must not exceed: in the case of a Market Purchase, one hundred and fi ve per cent. (105%) of the Average Closing Price of the Shares; and in the case of an Off-Market Purchase, one hundred and twenty per cent. (120%) of the Average Closing Price of the Shares, in each case, excluding related expenses of the purchase or acquisition. For these purposes: Average Closing Price means the average of the last dealt prices of a Share for the fi ve consecutive Market Days on which the Shares are transacted on the SGX-ST immediately preceding the date of the Market Purchase by the Company or, as the case may be, the date of the making of the offer pursuant to the Off-Market Purchase, and deemed to be adjusted, in accordance with the rules of the SGX-ST, for any corporate action that occurs after the relevant fi ve-day period; and date of the making of the offer means the date on which the Company announces its intention to make an offer for the purchase or acquisition of Shares from holders of Shares, stating therein the purchase price (which shall not be more than the maximum price calculated on the foregoing basis) for each Share and the relevant terms of the equal access scheme for effecting the Off-Market Purchase. 6.4 Status of Purchased Shares Shares purchased or acquired by the Company, in its capacity as a mutual fund company under Bermuda law, are deemed cancelled immediately on purchase or acquisition (and all rights and privileges attached to the Shares will expire on such cancellation). Accordingly, the issued share capital of the Company, but not the Company s authorised share capital, will be diminished by the nominal value of the number of Shares purchased or acquired by the Company. Cancelled Shares may be reissued by the Directors from time to time. 6.5 Source of Funds Pursuant to the Bye-laws and the Bermuda Companies Act, the Company may repay the capital paid-up on purchased or acquired Shares out of paid-in capital, share premium or other reserves and pay the premium (if any) on purchased or acquired Shares out of the realised or unrealised profi ts of the Company, share premium or other reserves of the Company. The Company intends to utilise its internal funds to fi nance its purchase or acquisition of the Shares. The Company does not intend to obtain or incur any borrowings to fi nance its purchase or acquisition of the Shares. The Directors do not propose to exercise the Share Purchase Mandate in a manner and to such extent that it would materially affect the working capital requirements of the Group. 15

17 6.6 Financial Effects The fi nancial effects on the Company and the Group arising from purchases or acquisitions of Shares which may be made pursuant to the Share Purchase Mandate will depend on, inter alia, whether the Shares are purchased or acquired out of profi ts and/or capital of the Company, the number of Shares purchased or acquired and the price paid for such Shares. The fi nancial effects on the Company and the Group arising from purchases or acquisitions of Shares pursuant to the Share Purchase Mandate, based on the audited fi nancial statements of the Company and the Group for the fi nancial year ended 31 December 2011, are based on the assumptions set out below Purchase or Acquisition out of Capital or Profits Pursuant to the Bye-laws and the Bermuda Companies Act, the Company may repay the capital paid-up on purchased or acquired Shares out of paid-in capital, share premium or other reserves and pay the premium (if any) on purchased or acquired Shares out of the realised or unrealised profi ts of the Company, share premium or other reserves of the Company, so long as the Company is, and shall after the payment be, able to pay its liabilities as they become due. Accordingly, there will be no impact on the amount available for the distribution of cash dividends by the Company regardless of whether purchases or acquisitions of Shares by the Company are made out of the Company s capital or profi ts Number of Shares Acquired or Purchased As at 12 March 2012 (the Latest Practicable Date ), the issued capital of the Company comprised 550,208,520 Shares. No Shares are reserved for issue by the Company as at the Latest Practicable Date. Purely for illustrative purposes, on the basis of 550,208,520 Shares in issue as at the Latest Practicable Date, the purchase by the Company of ten per cent. (10%) of its issued Shares will result in the purchase or acquisition of 55,020,852 Shares Maximum Price Paid for Shares Acquired or Purchased In the case of Market Purchases by the Company and assuming that the Company purchases or acquires 55,020,852 Shares at the maximum price of S$ for one (1) Share (being the price equivalent to one hundred and fi ve per cent. (105%) of the Average Closing Price of the Shares for the fi ve (5) consecutive Market Days on which the Shares were traded on the SGX-ST immediately preceding the Latest Practicable Date), the maximum amount of funds required for the purchase or acquisition of 55,020,852 Shares is approximately S$ 7,923,003. In the case of Off-Market Purchases by the Company and assuming that the Company purchases or acquires 55,020,852 Shares at the maximum price of S$ for one (1) Share (being the price equivalent to one hundred and twenty per cent. (120%) of the Average Closing Price of the Shares for fi ve (5) consecutive Market Days on which the Shares were traded on the SGX-ST immediately preceding the Latest Practicable Date), the maximum amount of funds required for the purchase or acquisition of 55,020,852 Shares is approximately S$ 9,023, Illustrative Financial Effects For illustrative purposes only and on the basis of the assumptions set out in paragraphs and above, the fi nancial effects of the: purchase or acquisition of 55,020,852 Shares by the Company pursuant to the Share Purchase Mandate by way of Market Purchases; and purchase or acquisition of 55,020,852 Shares by the Company pursuant to the Share Purchase Mandate by way of Off-Market Purchases, 16

18 on the consolidated fi nancial statements of the Company and the Group for the fi nancial year ended 31 December 2011 would have been as follows: Market Purchase Before share purchase Group As at 31 Dec 2011 S$ 000 After share purchase Group As at 31 Dec 2011 S$ 000 Before share purchase Company As at 31 Dec 2011 S$ 000 After share purchase Company As at 31 Dec 2011 S$ 000 Assets Non-current assets Aircraft 31,825 31,825 Investment in subsidiaries 97,625 97,625 Loans and receivables 71,712 71, , ,537 97,625 97,625 Current assets Cash and cash equivalents 42,166 34,243 3,628 Available for sale fi nancial assets 21,201 21,201 Intercompany receivables 49,081 44,786 Other assets ,898 55, ,815 44,892 Total assets 167, , , ,517 Liabilities Interest bearing liabilities 16,964 16,964 Other liabilities Total liabilities 17,930 17, Net assets attributable to Shareholders 149, , , ,582 Equity Share capital 415, , , ,495 Available for sale fi nancial assets revaluation reserve 17,077 17,077 Translation reserve (44,015) (44,015) (46,869) (46,869) Accumulated losses (238,975) (238,975) (219,044) (219,044) Total equity 149, , , ,582 Net asset per Share (S$ per Share) No. of issued and paid-up Shares (in thousands) 550, , , ,188 Basic earnings per Share (cents)

19 Off-Market Purchase Before share purchase Group As at 31 Dec 2011 S$ 000 After share purchase Group As at 31 Dec 2011 S$ 000 Before share purchase Company As at 31 Dec 2011 S$ 000 After share purchase Company As at 31 Dec 2011 S$ 000 Assets Non-current assets Aircraft 31,825 31,825 Investment in subsidiaries 97,625 97,625 Loans and receivables 71,712 71, , ,537 97,625 97,625 Current assets Cash and cash equivalents 42,166 33,143 3,628 Available for sale fi nancial assets 21,201 21,201 Intercompany receivables 49,081 43,686 Other assets ,898 54,875 52,815 43,792 Total assets 167, , , ,417 Liabilities Interest bearing liabilities 16,964 16,964 Other liabilities Total liabilities 17,930 17, Net assets attributable to Shareholders 149, , , ,482 Equity Share capital 415, , , ,395 Available for sale fi nancial assets revaluation reserve 17,077 17,077 Translation reserve (44,015) (44, 015) (46,869) (46,869) Accumulated losses (238,975) (238,975) (219,044) (219,044) Total equity 149, , , ,482 Net asset per Share (S$ per Share) No. of issued and paid-up Shares (in thousands) 550, , , ,188 Basic earnings per Share (cents) Shareholders should note that the financial effects set out above, based on the respective aforementioned assumptions, are for illustration purposes only. In particular, it is important to note that the above analysis is based on historical numbers for the financial year ended 31 December 2011, and is not necessarily representative of future financial performance. 18

20 Although the Share Purchase Mandate would authorise the Company to purchase or acquire up to ten per cent. (10%) of the issued Shares, the Company may not necessarily purchase or acquire or be able to purchase or acquire the entire ten per cent. (10%) of the issued Shares. IN PARTICULAR, THE DIRECTORS DO NOT INTEND TO EXERCISE THE SHARE PURCHASE MANDATE UP TO THE MAXIMUM LIMIT AND TO SUCH AN EXTENT IF SUCH EXERCISE WOULD MATERIALLY AND ADVERSELY AFFECT THE FINANCIAL POSITION OF THE GROUP. 6.8 Tax Implications Shareholders who are in doubt as to their respective tax positions or the tax implications of share repurchases by the Company, or who may be subject to tax whether in or outside Singapore, should consult their own professional advisers. 6.9 Listing Rules The Listing Manual specifi es that a listed company shall report all purchases or acquisitions of its shares to the SGX-ST not later than 9.00 a.m. in the case of a Market Purchase, on the Market Day following the day of purchase or acquisition of any of its shares and in the case of an Off- Market Purchase under an equal access scheme, on the second Market Day after the close of acceptances of the offer. Such announcement currently requires the inclusion of details of the total number of shares purchased, the purchase price per share or the highest and lowest prices paid for such shares, as applicable. While the Listing Manual does not expressly prohibit any purchase of shares by a listed company during any particular time or times, because the listed company would be regarded as an insider in relation to any proposed purchase or acquisition of its issued shares, the Company will not undertake any purchase or acquisition of Shares pursuant to the proposed Share Purchase Mandate at any time after a price sensitive development has occurred or has been the subject of a decision until the price sensitive information has been publicly announced. In addition, in line with the best practices guide on securities dealings issued by the SGX-ST, the Company would not purchase or acquire any Shares through Market Purchases during the period of one (1) month immediately preceding the announcement of the Company s full-year results and the period of two (2) weeks before the announcement of the fi rst quarter, second quarter and third quarter results. The Listing Manual requires a listed company to ensure that at least ten per cent. (10%) of any class of its listed securities must be held by public shareholders. As at the Latest Practicable Date, approximately ninety-one point six per cent. (91.6%) of the issued Shares are held by public Shareholders. Accordingly, the Company is of the view that there is a suffi cient number of the Shares in issue held by public Shareholders which would permit the Company to undertake purchases or acquisitions of its Shares through Market Purchases up to the full ten per cent. (10%) limit pursuant to the Share Purchase Mandate without affecting the listing status of the Shares on the SGX-ST, and that the number of Shares remaining in the hands of the public will not fall to such a level as to cause market illiquidity or to affect orderly trading Take-over Implications Appendix II of the Singapore Code on Take-over and Mergers (the Take-over Code ) contains the Share Buy-Back Guidance Note applicable as at the Latest Practicable Date. The take-over implications arising from any purchase or acquisition by the Company of its Shares are set out below: Obligation to make a Take-Over Offer If, as a result of any purchase or acquisition by the Company of its Shares, a Shareholder s proportionate interest in the voting capital of the Company increases, such increase will be treated as an acquisition for the purposes of Rule 14 of the Take-over Code. If such increase results in a change of effective control, or, as a result of such increase, a Shareholder or group of Shareholders acting in concert obtains or consolidates effective control of the Company, such Shareholder or group of Shareholders acting in concert could become obliged to make a take-over offer for the Company under Rule 14 of the Take-over Code. 19